Prime Minister's department knew of warning

Prime Minister John Key speaks to media on the Brexit episode at Skycity Auckland on Saturday afternoon. 25 June 2016. New Zealand Herald photograph by Nick Reed

The Prime Minister's department was aware Zespri in China was warned about trade implications against New Zealand companies.

However, the Department of Prime Minister and Cabinet (DPMC) did not brief Prime Minister John Key or his office, because it was judged the claims by a Chinese industry group were unsubstantiated.

Zespri last week confirmed that one of its representatives in Beijing was given "unsubstantiated information" by a Chinese industry body about the prospect of trade restrictions by China and had passed that on to Embassy officials.

Its confirmation came after media reports that China could take retaliatory action against dairy and kiwifruit exports from New Zealand if a formal investigation into alleged steel dumping by China is launched by the Ministry of Business, Innovation and Employment.

MBIE is understood to have received two complaints from New Zealand steel producers about Chinese steel flooding the New Zealand market.

The DPMC had been copied in on July 8 Ministry of Foreign Affairs and Trade (Mfat) correspondence about the approach to Zespri.

"DPMC did not brief the Prime Minister or his office at this time as Mfat was following up to assess the veracity of the claims made," a DPMC spokesman said. "After this assessment, over the following days, including contact with relevant Chinese authorities, it became clear that the claims were unsubstantiated."

Trade Minister Todd McClay said last Sunday that he would have expected any concerns to have been raised with him by his Chinese counterpart, Gao Hucheng, in Beijing last week, and no competition issues had been raised by the minister.

A day later he acknowledged the NZ Embassy in Beijing had reported that an industry group approached a New Zealand company and raised the prospect of trade retaliation.